ON POINT / Medical costs & insurance

RICHARD KORITZ
Posted 4/10/17

ON POINT / Medical costs & insurance

This item is available in full to subscribers.

Please log in to continue

Log in

ON POINT / Medical costs & insurance

Posted

I’ve written several columns recently on Obamcare and insurance in general. I hope this column doesn’t reach a saturation level of boring you to death. 

I just received my quarterly Medicare summary and the numbers simply intrigue me from a national policy point of view. First a little background on Medicare. The policy position on Medicare is that the medical provider is to receive their costs back from providing medical services to those on Medicare, basically anyone 65 years of age and older. It is NOT designed to pay the provider of services a guaranteed profit. 

It is rather designed to assure the medical provider that they will not lose money on the patient. Capital expenses and labor costs all go into what the Medicare people will pay the provider. Essentially it is designed so that the provider breaks even, but does not make a profit as that term is normally understood.

My Medicare premium is deducted from my social security check. In addition, I have a Medicare supplement policy which I pay directly to my insurance carrier. I just received my “Quarterly Explanation of Supplemental Insurance Benefits” for the period from January 1 until March 31. The numbers on this explanation are fascinating. 

My medical providers billed $1,722 for services during those 90 days. Medicare determined that the amount they thought was appropriate was $636.75. What my insurance carrier actually paid was $273.75. Do the math and the insurance carrier paid just 16 percent of the amount billed as and for total satisfaction of the bill. My supplemental premiums and what was withheld from my social security check totaled over $700, which is far in excess of what my carrier and Medicare  paid the providers. If you look at the amount of what Medicare allowed, $636.75, that is 37 percent of what the providers billed. 

The clear inference from the spread sheet is that the medical providers, at least the ones I am using, like to bill a lot and then  accept a much lower amount as their actual fee. The government is saying that approximately 3 percent  of what the providers bill is reasonable. 

Two questions come to mind immediately. First who is that poor sucker that is paying full price? Secondly, what national policy is setting these medical rates? One can almost contemplate a company setting up a medical equivalent of the hotel price bidding websites. 

It is this huge gap between what the medical providers charge in the first place and what they accept as full payment that leads the public to question our nation’s medical services when it comes to paying for them. I have no problem with a medical provider charging a fee and seeking to make a profit. I have a real problem with price gouging. This spread between what is originally billed and what is the actual amount paid  is one of the driving forces behind the movement to nationalized medical coverage. Is it no wonder that several medical providers have chosen to not accept Medicare patients and simply bill their private clients a more reasonable fee on the front side? 

Our leaders, Republican and Democrat, need to take the partisan politics out of the insurance debate and develop a plan that covers the needs of the populace and is fair and reasonable to the providers. The only thing I really see is that the bureaucrats designing the system are getting paid a lot of money and everybody else is coming up short.

MATHMATICAL NOTE: I provided the raw data on my coverage because it is factual and you can interpret it as you deem appropriate We are bombarded every day with numbers and statistics from numerous entities. Look behind that numbers that entity provides you and see what the raw data is. People play games with numbers every day and we all pay  price if we don’t question the data.